You could conceivably use the default category for downloadables, but it's not recommended, as it's quite easy to forget. A non-downloadable product in a downloadable category will work, but it won't function as expected (particularly with regard to shipping).

You can set the maximum number of downloads allowed per product (per order), or expiration limits on downloadable links.

How they work: Customers

Customers add them to cart and purchase them as normally.

Customers are then presented with links to download their products on the receipt page.

Additionally, links to download are present in any receipt emails you may send out. It is included where the ^^receipt^^ placeholder is set in your receipt email templates. (It's in the default templates, if you're worried.)

Limitations

200MB limit on the size of an individual file. There is a limit on storage space of 100MB per store, but you may contact us to purchase additional space.

No upload status indicator. We know it's annoying, and it's on our list of things to improve.

No ability to monitor whether (or how many times) products have been downloaded.